By George Lattimore Posted September 25, 2018
Managed Service Providers (MSPs) around the world are more than familiar with Microsoft® Active Directory® (MAD or AD). Even though it’s mainly limited to on-prem, Windows-based devices, MAD has been dominating the IT infrastructure space for almost 20 years. In 2000, 97% of all devices ran on Microsoft operating systems, so leveraging MAD in the workplace was more than appropriate back then. Additionally, most organizations were using Microsoft Exchange, Outlook, and Windows File Server, so Microsoft had an all-around dominating presence within the workplace. In 2012, however, less than 20% of all devices in use were Microsoft-based (including phones). This decrease in Microsoft-based devices affects IT of course, and represents how the grasp was loosening. Today? Many organizations have shifted away from using Microsoft IT resources, and the opportunity to move to the cloud has presented an entirely different direction for MSPs to manage client organizations. Let’s take a closer look at how the IT industry is changing and whether cloud Active Directory for MSPs is still the best option for modern client management.
Moving Away from On-Prem & Break-Fix
The demand for web applications, the rising influx of Mac® and Linux® systems in the workplace, and the limitations around using on-prem, Windows-only servers are causing client organizations to consider new ways of managing their infrastructure. When these organizations look to off-board their IT management, cloud-forward MSPs are seizing the moment by providing scalable and reliable cloud-based services. As a result, these cloud-forward MSPs are seeing significant efficiency gains, spending little-to-no time commuting to their clients and fixing servers, gaining time back for managing more clients.
While this industry-wide migration to the cloud is still largely underway, 75% of MSPs still offer break-fix services based around maintaining physical servers on-prem. Why? Traditionally, this is how client management has been conducted for some time, and change rarely comes easy. But, as the industry continues to change, cloud-forward MSPs are seeing a new opportunity on the horizon, and beginning to shift their business model away from on-prem maintenance. In fact, managed services accounted for 33% of revenue for MSPs in 2017, while break-fix only accounted for 18%. MSPs are realizing the inherent difficulty of trying to scale their business through the break-fix model, and are wondering how they can overcome the workflow roadblocks of Active Directory.
If you’re an admin at an MSP, you’re probably well aware of the pain points that inevitably surface from managing clients using Active Directory. These points of friction have pushed MSPs towards the break-fix model in the past, and commonly include:
- On-call commuting for server maintenance
- Complex network infrastructures with VPNs
- Network breakdowns and inefficiencies
- Security gaps
- Labored onboarding/offboarding
- Windows-based platform limitations
- Integration difficulties with cloud providers
According to Datto’s 2018 State of the MSP Report surveying 2,300 providers, lack of time and resources is the biggest challenge MSPs are facing today as they try to grow their businesses. Issues with the standardization of services and operational efficiency are also listed as top factors preventing growth.
Full Cloud Adoption for Managed Services & Recurring Revenue
Without a doubt, there are some situations in which delivering a hybrid combination of on-prem and cloud-based managed services makes sense. At the same time, if you’re ready to move your entire product stack and clientele to the cloud in order to adopt a more progressive business model—you’re certainly not alone. Before 2010, according to TSIA, most managed services were performed on-prem. In 2017 however, the tide has turned towards the cloud as 83% of service operations were remotely delivered.
What’s the bottom line for managing your IT services remotely? The opportunity to scale your Monthly Recurring Revenue (MRR). By leveraging cloud identity management, you can take advantage of automation, avoid commuting, and ultimately do more with less. You can bring on more clients, operate more efficiently, and grow your business month-over-month.
MSPs are continuing to meet big growth opportunities in 2018 with a more stable and scalable business model, but for those MSPs struggling to make the full transition, what’s the sticking point?
Replacing Active Directory®
Leaving Active Directory behind is a real opportunity for cloud-forward MSPs to cut ties with on-prem mantainenance. As more and more client organizations emerge with heterogeneous environments (Mac, Windows®, and Linux platforms), MSPs are in need of something cloud-based that’s also platform-agnostic. In order to accommodate the wide variety of protocols required to integrate with the exploding number of cloud technologies, a new directory has become a necessity.
JumpCloud® Directory-as-a-Service® is a next generation reimagination of a cloud Active Directory for MSPs. With a strong base of partners already enrolled in JumpCloud’s Partner Program, and MSP-specific features like the Multi-Tenant Portal, now’s the time to make your move to a cloud-based directory service. Apply to be a JumpCoud Partner and our Partner Support team will follow up with details.